IGO Limited (ASX:IGO) reported today an impairment on assets acquired from Western Areas.
The company expects a charge between A$880 million and A$980 million.
"The impairment relates to the reassessment of the accounting value at Cosmos and Forrestania to reflect higher capital and operating costs, challenges to the mine production schedule and delays in development at Cosmos. As a result, guidance provided on 31 October 2022 with respect to Cosmos has been withdrawn," wrote the company.
IGO was down 4% to A$15.40.
In 2021 IGO acquired Western Areas for $780 million.
IGO’s Acting CEO Matt Dusci said he was disappointed.
“Recording a significant impairment against the WSA assets is disappointing," said Dusci. "While the project development team has made solid progress to advance Cosmos towards first production, capital and operating cost escalation and unforeseen operational challenges have impacted the value of the project. A detailed independent review of the project development strategy and mine plan has now commenced and will provide a comprehensive assessment of the risks and opportunities for Cosmos. We will keep the market updated as this review progresses.
“As a long-life nickel asset, Cosmos remains important to our nickel business and provides potential downstream optionality via our aspirations to develop an Integrated Battery Materials Facility in Western Australia."
and cosmos project update